Michael Burry : The Toxic Twins Of Fiat Currency And An Activist Fed Set The Route To Long-Term Ruin

Michael Burry's ironic plight against pervasive lemming groupthink (such as the one gripping the nation currently) has been well documented in Michael Lewis' "The Big Short." It is thus not surprising that the topic of his speech to the Vanderbilt University (of which he is an alum) Chancellor's Lecture series is the current flawed conventional thought paradigm: that of central planning, of quantitative easing and of dollar debasement by the Fed, which are far more dangerous than anything experienced during the credit bubble as when the current regime finally fails, and it will fail, there will be nobody to bail out the US. From Burry's speech: "I am worried about a future of a nation that refuses to acknowledge the true causes for the crisis. A historic opportunity was lost. America has instead chosen its poison as its cure... Today I expect the US government to attempt to continue easy money policies into the next presidential term, past the foreclosure crisis, and past the corporate and public refinancing humps that are forthcoming. Junk bonds incredibly are again at all time highs. Quantitative Easing seems to be working for now. Buit this is an invalid validation of what America is doing. This is in fact a Pyrrhic gamble. As we continue to debase our currency, Bernanke says he is not printing money, again I disagree. As it stands I get an email from the Fed saying we bought another X billion in Treasurys. I don't know - that's pretty clear to me. In fact this program QE2 its scope and breadth raises the severe question of the Treasury's needs. The government's borrowing of money for the purposes of injecting cash into society, bailing out banks, brokers and consumers, is a short-sighted easy decoision for a population that has not yet learned that short-sighted, easy strategies are the route to long-term ruin. We never quite achieved the catharsis necessary to stoke the reevaluation of our wants, need, and feers. Importantly, the toxic twins: fiat currency and an activist Fed remain firmly entrenched, even more so with the financial reforms last year."